Going into its fourth year, one of the things the Quipu team and its CEO Roger Dobaño are proud of is their low churn rate.

Quipu is an online billing software that solves your daily administrative tasks. And as with any SaaS product, churn is a number they keep close track on, says Dobaño:

I’m in touch with the churn numbers daily, but we measure it monthly, like most startups.

A low churn percentage is not only validating that they’ve built a product people like, but keeping the rate down over years has also taught them a lot about how their customers think and act, according to the CEO:

For a B2B SaaS company, it’s often quite expensive to acquire new users, so we’re very proud that we’ve been able to hold churn under one percent from the start.

Support

It’s not rocket science, with more customers come more responsibilities, and that means a higher demand for service.

As you’re scaling your customer base, one of the most important things you need to do is to make sure your customer service team scales together with your customers. The easiest way to keep churn down, is to have someone that really understands the product and cares about the customers.

He continues:

Even though many of your customers never need any help with the product, it’s part of the trust relationship you build, as the customers know that there are humans to talk to at the other end of the software.

The first 12 months Quipu didn’t hire customer care people says the CEO:

For the first year of our business, I did all the customer support myself. Not only because the team was small, but so that I always knew what our customers thought about our product.

He says he’s still in touch with the customer service team, as it’s one of the best ways to know how to develop and improve the product.

He explains that the way customer service agents should attend struggling users could be an article in itself. The baseline is to listen a lot, be understanding, patient and get to the core of what kind of problem the user is facing. There’s usually always a way to fix it.

No automated unsubscribe button

It’s not about making it hard for customers to unsubscribe, according to Roger, but it’s about understanding why they want to leave.

If you want to unsubscribe, we’ll get notified when you push the button, and we’ll get in touch. Their reason for unsubscribing is often connected to a task we can help them achieve very easily, preventing them from leaving and making them happy again.

And if the customer has decided to leave anyway, you’ll at least have the data on why, if you actually talk to them. It’s also for security reasons, as people’s financial data has to be treated carefully.

When you’ve grown a significant amount of customers or users you should also consider measuring CSAT and NPS metrics.

Apart from great service, upselling is another way to prevent customers from choosing another product. The more ways people use your product, the lesser is the chance of the person leaving you.

With a very low churn rate, you’re actually able to reach negative churn, if you’re able to upsell enough.

Quipu is counting 13 heads these days, but growing steadily every quarter.

Track patterns

When you have a payback period of one year, which is normal in SaaS companies, you need to know that people are happy especially in the beginning to keep the retention rate high.

Apart from speaking with the customers, tracking their movements and tasks inside the product is a very good way of seeing where it goes right and wrong.

For example, in Quipu one of our services is managing invoices. After looking at the user movements, we now know that the retention rate is much higher if the user creates three or more invoices. With this info we’ve been able to retain more customers over the years.

Dobaño adds that it’s also important to use movement trackers to contact users who are struggling, even before they complain or think about leaving.

Don’t go crazy with features

It’s both upsides and downsides to talking a lot with your customers (obviously more positive sides though). One of the challenges is that people have a lot of thoughts on what kind of features you should develop next.

If you’re working B2B, you’re in touch with professionals, and they’re aware of what type of features would make their day easier.

This results in new features that both keep the retention rate high and make it easier to acquire new users.

But it is easy to take water over your head and create ten good features to please everyone, instead of making 3 perfect features. It’s a difficult balance, according to Roger:

We try to focus 60 percent of our capacity on building our existing product better, and 40 percent of our time making features for acquiring new customers.

The holy two percent

When you’re working with high growth products, it’s often essential to be raising funding from investors.

A motivation in keeping your churn low is that most investors will not bet on a SaaS startup if it has a churn rate of 2 percent or more.

So even though you’re acquiring a lot of customers early on, having churn in mind from the first minute, can be more valuable than you think.

Some last tips on the list to prevent churn you should consider is:

  • Make meaningful partnerships with complimentary services.
  • Don’t let credit cards expire.
  • Let the whole team know your churn rate and be aware of changes
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V.

VCs come into action — Breakdown of Spanish investment activity of January 2018

January closes with €195.3 million investments in Spanish startups within 24 operations

  • The Spanish entrepreneurial ecosystem is maturing thanks to investment rounds of more than €10 millions.
  • Barcelona and Madrid continue leading the Spanish ecosystem.


This is the first in a series of posts in which we will do an analysis of the Spanish startup investment landscape. We will look at the overall funding numbers and trends in the country month by month and compare it with data of the previous year.

What are the Spanish investment activities like on a month to month basis? What deals and volumes are we talking about? At what stages are startups prone to search investment and which regions in Spain attract the most funding?

The year 2017 brought us plenty in terms of innovation and investment activity within the area of technological startups, although Spain has been driven by political problems. The developments we have seen in 2018 so far are picking up at just the same fast pace.

January has closed with €195.3 million investments in Spanish startups within 24 operations. Of these funding rounds, highlights are the round of Cabify, Hawkers and Redpoints :

  • Cabify: The ride-hailing app that competes against Uber, has raised €143.3 million ($160) Series E funding round from a mix of previous and new investors, including Rakuten Capital, TheVentureCity, Endeavor Catalyst, GAT Investments, Liil Ventures and WTI, as well as prominent local investors from Spain and Latin America.

When analyzing the structure of financing deals, the increase in venture capital activity in Jan-18 is noticeable in comparison with Jan-17.

#Deals and volume in the Spanish startup investment landscape in January


In terms of the number of deals closed, we have seen a slight downward trend in the country. With a broad participation of Venture Capital, there have been less deals but more capital invested in each transaction. The reason for such a boost is mostly the gigantic financing round of Cabify with participation of giants’ VCs like Rakuten Capital, TheVentureCity and others.

The entry of European, American and Japanese funds investing in Spanish startups are accounting for a large percentage of the growth of the investments in Spain. At the same time, this global investment rise is making the average value of the financial rounds soar up to more than 1.5 times that of the previous year (without taking account of Cabify’s investment, that would turn this factor to more than 6 times the previous year)

The differences between January-2017 and January 2018 in terms of the increase in venture capital activity is shown below:

Startup investment deals by size of round


As we expected to see, the number of operations closed by investment size tends to a larger number in larger deals. While the number of deals of €500k or less have decreased considerably, the number of larger deals have gone up notably. This might be understood as an increasing number of companies maturing and reaching later stages of funding.

To properly ensure the aforementioned, in the following figure we show the breakdown of the investment activity by year of foundation of the company:

Startup investment activity (Jan-18) by year of foundation


Our previous statement is reinforced by this figure. The large transactions take place on established companies. In general, the more years a startup survives, the more established it is. As we observed, in average, the startups that were previously founded are those who raised more funding. That makes sense because normally an older startup has a bigger team and unless it has reached breakeven, it will need more funds to survive.

Startup investment deals by Region



Regarding the breakdown of startup investments by region, Barcelona, Madrid and Valencia bolster their position in the top of Spanish regions:

  • Cataluña (mostly in Barcelona) stands with 9 deals closed and an investment of €19 millions
  • Madrid gathers 7 deals and an investment of €148 million (€143 million in Cabify)
  • Valencia up to 3 deals and €23 million (€20 million in Hawkers)

Operations January 2018: